JP Morgan Chase & Co. predicts more pain in its future – and more pink slips.

The nation’s second-largest bank warned yesterday that its third-quarter earnings will be “well below” the last quarter because of problem loans and plummeting trading gains.

Further job cuts can be anticipated, said William Harrison, chief exec of JP Morgan Chase, in announcing the disappointing outlook.

“We had too much concentration in the telecom space,” explained Harrison, in a conference call with investors and analysts. “I am very disappointed with our results and take full responsibility for them.”

It is the sixth drop in net income in seven quarters – since the $32 billion merger of JP Morgan and Chase Manhattan Corp. at the end of 2000.

JP Morgan Chase is the world’s biggest arranger of syndicated loans and a leading underwriter of corporate bonds. The big bank has been hit by Enron Corp.’s bankruptcy, as well as by other business failures.

The bank expects its loan losses to jump to $1.4 billion in the three months ending Sept. 30, up from $302 million in the previous quarter.

“We lost money on positions across our dealers’ books, and also had losses on our proprietary trading desk,” explained Dina Dublon, chief financial officer for JP Morgan, during the conference call.

The defaulted loans were in the bank’s multibillion-dollar telecommunications and cable company portfolios, the execs said.

The stock has dropped 40.7 percent this year. JP Morgan shares dropped from $21.55 to $19.70 in after-hours trading yesterday.

There was more bad news for the bank yesterday as well, as Standard & Poor’s credit rating agency lowered JP Morgan’s debt a notch to A+.

The nasty fall in revenues means another round of layoffs are on the agenda.

“Clearly the company has not been creating the revenues to justify its workforce,” said Craig Woker, stock analyst at Chicago-based Morningstar Inc. “It’s going to take a long time to see a recovery in capital markets and corporate lending. If the bank wants to shore up its margins it will have to cut more jobs.”